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I BUILT AN OPEN-SOURCE DMA CALCULATOR TO COMPARE EU STORE FEES IAP VS EXTERNAL -

I built an open-source DMA Calculator to compare EU Store fees (IAP vs External) - looking for feedback!

Understanding the Digital Markets Act and Its Impact on App Developers

The digital landscape in the European Union is undergoing a seismic shift due to the implementation of the Digital Markets Act (DMA). As developers and digital product owners, we have watched closely as Apple and Google restructure their fee models to comply with these new regulations. The core of the DMA is to ensure fair competition, opening up the historically closed ecosystems of mobile app stores. This legislation introduces a critical choice for developers: remain on the traditional In-App Purchase (IAP) system or utilize the new External Purchase Links (EPL) and Alternative Billing Systems.

However, this choice is not merely a binary switch; it is a complex mathematical equation involving varying commission rates, new technology fees, and acquisition costs. We recognized the confusion surrounding these changes. Many developers are asking: Does switching to external payment links actually save money? The answer depends heavily on the app’s revenue volume, the percentage of users in the Small Business Program, and the conversion rates affected by mandatory warning screens.

To address this complexity, we have analyzed and documented the development of a comprehensive, open-source DMA Calculator. This tool is designed to cut through the ambiguity of the new fee structures. By utilizing a transparent, code-based approach, we aim to provide developers with precise, actionable insights into their potential annual savings or losses under the new EU regulations.

The Traditional In-App Purchase (IAP) Model

Under the standard IAP model, Apple and Google have historically taken a 30% commission on digital goods and services. With the introduction of the DMA, this model has not been eliminated but rather adjusted. Apple has introduced a Core Technology Commission (CTC). For apps that remain on the standard IAP terms, the fee structure is as follows:

The alternative to IAP is using External Purchase Links. This allows developers to direct users to a website to complete a purchase, bypassing the in-app payment system entirely. However, this does not mean zero commission.

The Google Play Alternative

Google’s approach under the DMA is similar but distinct. Google offers user choice billing (external payments) with a discount. If a user chooses an external payment provider, Google reduces its service fee by 4%. However, the baseline for digital goods remains higher than Apple’s new structure for many categories. Our calculator accounts for the Google Play Service Fee adjustments and the impact of the Small Business Program (which offers a 15% rate for the first $1M in revenue).

Introducing the Open-Source DMA Calculator

To navigate these intricate fee structures, we built a React Native application using Expo, available as a web demo, and natively deployable to iOS and Android. This tool is not a static chart; it is a dynamic calculator that allows developers to input specific variables relevant to their business.

Core Functionality and Inputs

The calculator requires specific data points to generate an accurate projection:

  1. Annual Revenue: Total gross revenue generated in the EU storefront.
  2. Annual User Base: The total number of active users (installs).
  3. Platform Split: The ratio of iOS vs. Android users (e.g., 60% Apple, 40% Google).
  4. App Size Category: Whether the app qualifies for the Small Business Program (Revenue < $1M).
  5. User Tenure: The percentage of users who have had the app installed for more than 12 months (triggering the Core Technology Commission/CTC).
  6. Conversion Impact: An estimated percentage drop in conversion rate due to the mandatory warning screens required by the DMA when using external links.

The Technology Stack

The calculator is built for accessibility and transparency:

Breaking Down the Formula: How Savings Are Calculated

Transparency is the cornerstone of this project. The mathematical logic driving the calculator is documented in FORMULAS.md within the repository. We rely on official documentation from Apple and Google to ensure accuracy.

1. Standard IAP Cost Calculation

For the IAP scenario, the cost is a direct function of revenue and user tenure. IAP Cost = (Revenue * SmallBizRate) + (Revenue * 12MonthUserRate * CTC_Rate)

The EPL cost calculation involves a more complex matrix of fees: EPL Cost = (Commission on Sales) + (CTF on Installs) + (Payment Processor Fees)

3. Conversion Rate Impact

The most volatile variable is the mandatory warning screen. When a user clicks an external link, the OS displays a system-managed sheet warning them they are leaving the app. Historically, this friction reduces conversion rates.

4. Small Business Program Considerations

For apps with revenue under $1 million, the math changes significantly. The 10% commission on IAP is highly competitive. The €0.50 install fee under EPL becomes the dominant cost factor for high-growth apps with low ARPU (Average Revenue Per User). Our calculator highlights the “break-even” point where the install fee outweighs the commission savings.

Detailed Feature Breakdown

Multi-Platform Support (iOS & Android)

The calculator does not treat iOS and Android as a monolith. Developers can define the user split.

Currency and Localization

The tool is designed for a global audience but rooted in EU regulations. It supports 5 languages:

  1. English (EN)
  2. Italian (IT)
  3. German (DE)
  4. French (FR)
  5. Spanish (ES) This ensures that developers across the major EU markets can use the tool without language barriers.

Detailed Breakdowns vs. Summary

We offer two modes of visualization:

  1. Summary View: A high-level comparison of “Total Fees Paid” under IAP vs. EPL.
  2. Detailed Breakdown: A line-item list showing:
    • Base Commission
    • Technology Fees (CTC/CTF)
    • Payment Processing Costs
    • Estimated Revenue Loss due to Conversion Drop

Why This Calculator Matters for Developers

Risk Mitigation

The Core Technology Fee (CTF) is a financial risk. If an app goes viral but has low monetization (e.g., a free app with minimal purchases, or a subscription with a long free trial), the €0.50 per install fee could bankrupt the developer. Standard IAP does not have an install fee. Our calculator allows developers to model “worst-case” scenarios to ensure they are not blindsided by bills from Apple or Google.

Strategic Planning

For larger developers, the savings potential is massive. Moving 50% of a user base to external payments can save millions in commission fees, provided the conversion rate drop is manageable. The calculator helps quantify the maximum allowable conversion drop.

Community and Open Source Collaboration

Current Status: Seeking Feedback

We have built the foundation, but the financial models are evolving. We are actively seeking feedback on the accuracy of the formulas. As Apple and Google refine their fee structures, the calculator must evolve. We invite developers to audit the FORMULAS.md file to verify the logic against official documentation.

Future Development Roadmap

We are looking for contributors to expand the tool’s capabilities:

  1. Country-Specific Fees: While the DMA is an EU regulation, VAT and local taxes differ. We plan to integrate region-specific tax logic.
  2. Scenario Modeling: Adding “What If” scenarios, such as A/B testing different conversion penalties based on real-world data from other developers.
  3. More Detailed Breakdowns: Visualizing cash flow impacts month-over-month rather than just annual totals.

How to Contribute

We utilize TypeScript to maintain high code quality. Contributors can fork the repository, make changes to the calculation logic, and submit pull requests. We welcome bug reports if any discrepancies are found between the calculator’s output and official tax invoices from Apple or Google.

Interpreting the Results: A Practical Example

Let us consider a hypothetical scenario to illustrate the calculator’s utility:

IAP Calculation:

External Link Calculation (Assuming 10% conversion drop):

Result: In this specific high-install, low-revenue scenario, External Links are significantly more expensive due to the CTF. The calculator instantly highlights that unless the app monetizes aggressively or reduces install volume (impossible), sticking to IAP is the safer financial choice. Without a calculator, a developer might assume “27% is less than 30%” and make a costly mistake.

Conclusion

The introduction of the Digital Markets Act has created a complex financial environment for app developers in the EU. The choice between IAP and External Purchase Links is not straightforward; it involves a delicate balance of commission rates, new technology fees, payment processing costs, and user behavior changes.

We have built this open-source DMA Calculator to demystify these variables. By providing a transparent, code-driven tool hosted on GitHub and available via GitHub Pages, we empower developers to make data-backed decisions. Whether you are an indie developer utilizing the Small Business Program or a large publisher managing millions of installs, understanding the mathematical nuances of the DMA is essential for financial health.

We invite the developer community to test the live demo, review the formulas, and contribute to the repository. Together, we can navigate the regulatory changes of the DMA with precision and confidence.

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